Tax Calculator

To add tax, multiply the net amount by 1 plus the rate; to remove it, divide the gross by 1 plus the rate — so 240 including 20% VAT is 200 net plus 40 tax, not 240 minus 48. Enter an amount and a rate to get the net, tax and gross figures for VAT, GST or sales tax.

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Updated 19 October 2026

Add tax to a net price

Remove tax from a total

Amount before tax

Tax rate

Common rates

Currency

Total including tax

£240.00

Tax at 20% is £40.00.

Net (before tax): £200.00
Gross (including tax): £240.00

Net: £200.00
Tax: £40.00
Gross: £240.00

How this was calculated

Tax = £200.00 × 20/100 = £40.00
Gross = £200.00 + £40.00 = £240.00

Please note

This is a general arithmetic tool. Tax rules, thresholds, exemptions and reduced rates vary by jurisdiction and by product. Check with a qualified accountant or your tax authority for anything official.

How to use the Tax Calculator

1Choose whether you are adding tax to a net amount or removing it from a gross amount.
2Enter the amount and the tax rate.
3Read the net, tax and gross figures.
4Use the preset rates if your country's standard rate is listed.

How it works

Adding tax multiplies the net amount by one plus the rate. Removing tax is the trickier direction, and it is where mistakes happen: you cannot take 20% off a gross price to find the net. You divide by 1.20 instead.

The difference is not small. Take 20% off 120 and you get 96; divide 120 by 1.2 and you get 100, which is the correct net figure. The tool always uses the division form when extracting tax.

All figures are rounded to the nearest cent using half-up rounding, which is what invoices and receipts use.

The formula

gross = net × (1 + r) net = gross ÷ (1 + r) tax = gross − net

net: the amount before tax
gross: the amount including tax
r: tax rate as a decimal, e.g. 0.2 for 20%

Extracting tax divides by (1 + r). Subtracting the rate from the gross price gives the wrong answer.

Worked example

A 240 invoice total that includes 20% VAT

Net = 240 ÷ 1.20 = 200
Tax = 240 − 200 = 40

Result: 200 net plus 40 VAT. Note that 20% of 240 is 48, which would be wrong.

Tips and common mistakes

To remove tax from a price, divide by one plus the rate; subtracting the percentage gives the wrong answer.
Check whether a price is quoted with or without tax before adding anything.
Rates change, and some goods carry reduced rates. Confirm the current rate for what you are pricing.
On invoices, decide whether tax is rounded per line or on the total, and do it the same way every time.

Frequently asked questions

How do I remove VAT from a price?

Divide the gross price by 1 plus the rate. For 20% VAT, divide by 1.2. Subtracting 20% from the gross gives too small a net figure.

What is the difference between VAT, GST and sales tax?

VAT and GST are charged at each stage of the supply chain with credits for tax already paid; sales tax is charged once at the final sale. The arithmetic here is identical for all three.

Can I calculate several tax rates at once?

Enter a combined rate if your jurisdiction stacks state and local rates. For compound taxes charged on top of each other, use the calculator twice.

How do I add 20% VAT to a price?

Multiply by 1.2. A net price of 50 becomes 60 with 20% VAT.

How much of a tax-inclusive price is tax?

The rate divided by one plus the rate. At 20%, tax is 0.2 ÷ 1.2 — one sixth — of the gross price, so 20 out of 120.

Why do invoice totals sometimes differ by a cent?

Rounding tax on each line and rounding it once on the total can give results a cent apart. Both are legitimate; what matters is using one method consistently.

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